Cal State system facing $1.8B backlog in maintenance

Top administrators for the California State University system warned legislators that years of budget cutbacks have left a $1.8 billion backlog of needed critical repairs and upgrades on campuses throughout the state.

With nearly half its buildings more than 40 years old and infrastructure such as heating, ventilation and air conditioning deteriorating, the 23-campus CSU system faces a crisis, officials said.

From the Chancellor's Office in Long Beach to the Capitol in Sacramento, officials are urging Gov. Jerry Brown and California legislators to address a problem they say has reached a critical stage.

"It really is a crisis," said CSU Chancellor Timothy P. White. "We are so vulnerable to losing classrooms and labs. It's not a crisis in health and safety, but it's a crisis in there are so many buildings that are old."

CSU hasn't received funding for deferred maintenance since 2007-08, and officials are seeking $15 million a year in each of the next three fiscal years to finance up to $800 million in bonds for upgrades and repairs, saying deferred maintenance costs will balloon to $2.2 billion a year by 2016 without an annual investment of at least $100 million a year.

How that money would be spent is yet to be determined, but CSU is in the process of putting together a utilities master plan and is working on the best way to use funding, based on critical priorities across its campuses.

In January, a science building constructed in 1953 at San Francisco State University was closed for the spring semester when asbestos, lead paint and mercury were discovered before the start of the semester, sending officials scrambling to relocate thousands of students to other labs, including those in local school and community college districts, as well as at UC San Francisco.

Leslie E. Wong, president of SFSU, told CSU trustees at January's regular meeting in Long Beach, with Brown in attendance, that he doesn't know if the building will ever be used again.

Fresno State University has faced power outages over the past couple of years that have led to the cancellation of classes. In 2012, the campus was without power for four days, starting on New Year's Eve, when a voltage spike hit the more than 60-year-old electrical system.

"The problem with deferred maintenance is sort of like your house," said Willie J. Hagan, president at Cal State Dominguez Hills in Carson, which needs more than $4.3 million in electrical and waterline upgrades. "If you don't have the money to repair the roof, or you say you don't, or you don't put resources toward that, when the leak comes through the roof, destroys the wall, destroys the room, destroys your computers, then the question is, wow, we should've repaired the roof."

With Gov. Brown sitting next to him at the January trustees meeting, Chancellor White called on state lawmakers to fund urgent infrastructure needs in the system.

"It is important for us to have a coherent short-term and long-term plan for our capital issues, but we're also facing a critical moment in infrastructure that is a real inhibition to our student learning environment," White said.

Brown's budget prices California's infrastructure deferred maintenance at $64.6 billion, which the governor wants to address with one-time spending of $815 million from a variety of funding sources. The needs span from transportation and courts to jails and the K-12 and community college systems.

"We have enormous liabilities, and you have a little piece of that," Brown told CSU trustees at the trustees meeting. "But you should relax because you are so much better off than the total state of California is."

Brown also proposes to shift debt service payments into CSU's budget from the state. That means CSU would be responsible for issuing its own revenue bonds for capital projects. The proposal is similar to what lawmakers authorized last year for the University of California.

Under the proposal, CSU would report project priorities to the Joint Legislative Budget Committee and submit them to the state Department of Finance for approval.

Brown said his proposal gives CSU more spending authority and increased flexibility.

"I'm really looking at what is the highest priority, what's the highest need?" Brown told trustees.

Still, his proposal was met with concern by the nonpartisan state Legislative Analyst's Office, which questioned whether it would reduce the Legislature's oversight of state funds spent by CSU.

The LAO also said Brown's proposal presupposes that an amount of debt service funding -- at around $296 million -- is the right base amount for ongoing needs, "yet the administration offers no evidence to this effect."

Elvyra San Juan, assistant vice chancellor for capital planning, design and construction at CSU, said Brown's plan will streamline the process to get projects approved, but its effectiveness will depend on the state economy and CSU's administrative abilities, as officials weigh deferred maintenance priorities on 23 campuses.